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Asian stocks gain as upbeat China data lifts mood

EconomySep 15, 2020 02:10AM ET
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© Reuters. Passersby wearing protective masks walk past an electronic board showing Japan's Nikkei average, in Tokyo

By Anshuman Daga

SINGAPORE (Reuters) - Asian equities advanced on Tuesday and the dollar slipped, with investor sentiment supported by Chinese data and optimism about COVID-19 vaccines.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, for a fourth straight day of gains, up nearly 3% so far this year.

E-Mini futures for the S&P 500 put on 0.2%, reversing early losses, while EUROSTOXX 50 futures eased 0.2%.

Chinese blue chips added 0.7%, buoyed by data showing China's industrial output rose 5.6% in August from a year ago, expanding for a fifth straight month. The yuan climbed to a 16-month high. [B9N2F802B]

"The activity data today shows that the recovery in the private sector gained momentum in August. The recovery in China has become more balanced and broad-based," HSBC economists said in a report.

Japan's Nikkei shed 0.5%, while South Korean shares were 0.5% higher and Australia's S&P/ASX 200 index eased 0.2%.

Japanese Chief Cabinet Secretary Yoshihide Suga won a ruling party leadership vote, paving the way for Japan's first change of leader in nearly eight years.

Strategists expect Japanese equities to take support from Suga's win.

"He's seen as someone who's particularly stock market friendly. The fact that we've got political certainty for the next two years from someone who's connected to the free market is going to be good news for Japan," said Jim McCafferty, joint head of Asia Pacific equity research at Nomura.

E-Mini futures for the S&P 500 slipped 0.3%, while EUROSTOXX 50 futures eased 0.2%

So far this year, gains in Asia have been led by technology stocks.

"From an asset class point of view, if you require to generate any income from your investment portfolio, then equities is one of the few places you can do that because bond yields are so low," said McCafferty, who prefers North Asian companies due to their stronger balance sheets.

He said investors who didn't want to pay lofty valuations of U.S. stocks could look to fast-growing tech companies in Taiwan and South Korea.

U.S. retail sales figures from August are due Wednesday.

Investors will also look to central banks for direction, with the U.S. Federal Reserve starting a two-day policy meeting on Tuesday, the first since unveiling a landmark shift to a more tolerant stance on inflation in August.

The Bank of Japan and the Bank of England announce their respective policy decisions on Thursday.

Markets will be focused on projections from Fed policymakers on the U.S. growth outlook and on any details about what the bank intends to do to encourage inflation.

The Dow Jones Industrial Average closed up 1.2% and the S&P 500 rose 1.3% while the tech-heavy Nasdaq Composite added 1.9%.

"We remain neutral stocks versus bonds as we balance extended equity valuations, fading fiscal support, and upcoming U.S. election risks against still ultra-low interest rates and a gradually improving economic environment," analysts at T. Rowe Price said in a global asset allocation report.

U.S. stocks gained after drugmaker AstraZeneca (NYSE:AZN) said it resumed its British clinical trials of its COVID-19 vaccine, one of the most advanced in development.

The dollar index slipped to 93.029, dipping further from a one-month high of 93.664 touched last week. The euro ticked up to $1.1867, having gained for four straight sessions until Monday.

Against the safe-haven yen, the dollar traded at 105.73 yen, having touched a two-week low of 105.55 yen on Monday.

Brent crude was down 0.2%, at $39.5, reversing earlier gains. U.S. West Texas Intermediate (WTI) crude futures were down 0.1% at $37.2 a barrel.

Gold prices put on 0.6%, extending a sharp rise in the previous session.

Asian stocks gain as upbeat China data lifts mood
 

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Comments (7)
David David
David9 Sep 14, 2020 11:55PM ET
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I told you guys...China is back and is recovering the fastest...
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David David
David9 Sep 14, 2020 11:55PM ET
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China did the best job...they only have a total of 4,742 deaths so far.
Paul Garcia
Paul Garcia Sep 14, 2020 11:55PM ET
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China owes the world an apology and compensation. They caisused this and deserve severe punishment.
Gerald Zhang
Gerald Zhang Sep 14, 2020 11:55PM ET
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Paul Garcia *****my dik
David David
David9 Sep 14, 2020 11:55PM ET
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China does not owe the world anything, the world owes China an apology to say it started in China. We now have facts that the virus has been around well before Wuhan in other countries, as the virus was found in sewer systems.
Jeff Chevalier
Jeff Chevalier Sep 14, 2020 11:55PM ET
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In the US, trump owns this completely. Remember, it's just a flu. It will go away in April! The Chinese never said that...
Dietmar Stahl
Dietmar Stahl Sep 14, 2020 11:16PM ET
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Anyone trust Chinese data now
David David
David9 Sep 14, 2020 11:16PM ET
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So far I have not found evidence that China lied, so yes I trust China data 100%.
Paul Garcia
Paul Garcia Sep 14, 2020 11:16PM ET
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David David china lied. Sorry to burst your bubble.
jack hong
jack hong Sep 14, 2020 11:16PM ET
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David David  even the Chinese would be astonished by your naivety. Find a job in the propaganda department, you'll be paid a LOT more than trading here.
John Smit
John Smit Sep 14, 2020 10:04PM ET
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Vaccine blah blah blah
Leon Kelly
Leon Kelly Sep 14, 2020 10:02PM ET
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Here we go again
Ganesvaran Pachimuthu
Ganesvaran Pachimuthu Sep 14, 2020 8:34PM ET
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Look at KLSE HLT Global for the past two days.. being limit up for 2 days consecutive, despite so many vaccines news..
Ganesvaran Pachimuthu
Ganesvaran Pachimuthu Sep 14, 2020 8:29PM ET
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I don't think vaccines will effect Asian shares... a lot of speculation without positive outcome..
KoolAid Trader
KoolAid Trader Sep 14, 2020 8:19PM ET
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I think Asian stocks will go up this week
 
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